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Old 06-11-2018, 06:38 PM
 
10,527 posts, read 19,940,123 times
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Hello

I'm wondering if it's possible to buy a home in full with a check and then once moved in do a "refi" of sorts and take out a loan. Would be at least 80% probably more like 50% or so.

What are the rates like on this arrangement? Fees? I know when first buying a home the fees are outrageous, when we refi'd they were super low and the process was very simple. Hoping it's more the latter than the former.

I'd like to avoid all the BS and fees plus delay associated with getting a mortgage but would like to take the cash back out to put back into investments once settled.

HELOC is not what I'm looking for as they have high rates. Looking for a standard 10 or 15 year.

Thanks
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Old 06-11-2018, 08:29 PM
 
Location: NYC, CHI, UK
455 posts, read 390,401 times
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OP, I've not done it, so I can't help you with any of your questions, but the process you're referring to is called "delayed financing".
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Old 06-11-2018, 08:31 PM
 
10,218 posts, read 6,360,779 times
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https://mymortgageinsider.com/cash-o...ear-home-6888/

“If your home is paid off and you ever want money, you can apply for a home equity loan without much hassle,” she says. “However, a HELOC should be put in place before any emergency happens. It lasts 10 years, and you never ever have to take money out of it. But if you need it, it is there.”


if you do a cash-out refinance, it can cost because you have closing costs,”
For some people, taking out a cash-out refinance for an investment can be quite profitable.

“Let’s say you take out $100,000 from the refinance and invest it, and then create more assets and put back more than what it cost you, then great,”
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Old 06-11-2018, 08:35 PM
Status: "one of the wettest from the standpoint of water" (set 9 days ago)
 
Location: Denver CO
18,766 posts, read 9,830,183 times
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A re-finance of an existing loan isn't the same thing as taking a brand new cash out re-fi loan and you are mistaken that you are going to get away without paying for a re-fi under these circumstances.
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Old 06-11-2018, 08:37 PM
 
10,218 posts, read 6,360,779 times
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A home equity loan, sometimes called a term loan, is a one-time lump sum that is paid off over a set amount of time, with a fixed interest rate and the same payments each month. Once you get the money, you cannot borrow further from the loan

https://www.bankrate.com/finance/deb...-credit-1.aspx
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Old 06-12-2018, 03:13 PM
 
3,301 posts, read 7,198,494 times
Reputation: 4078
Quote:
Originally Posted by wheelsup View Post
Hello

I'm wondering if it's possible to buy a home in full with a check and then once moved in do a "refi" of sorts and take out a loan. Would be at least 80% probably more like 50% or so.

What are the rates like on this arrangement? Fees? I know when first buying a home the fees are outrageous, when we refi'd they were super low and the process was very simple. Hoping it's more the latter than the former.

I'd like to avoid all the BS and fees plus delay associated with getting a mortgage but would like to take the cash back out to put back into investments once settled.

HELOC is not what I'm looking for as they have high rates. Looking for a standard 10 or 15 year.

Thanks
Cashout refi always has higher rates than a Purchase loan, regardless of term.



Plus there are many variables that are missing from your post: the refi might have had lower fees for any number of reasons, from yield spread to portfolio retention to (if it was in the early part of the century) being a Fast and Easy refi, which no longer exist.

If saving money is your goal, do the purchase and avoid a cashout refi.
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Old 06-12-2018, 03:22 PM
 
Location: Austin
7,060 posts, read 16,774,446 times
Reputation: 9426
You have all the same costs pulling the cash out with a "refi" as if you did the loan upfront, except you might not have to pay for an appraisal if they can easily see the value. Many lenders are starting to do the stated value again. You purchase a title policy when you buy the house, and you will have to pay for a new title policy with you finance it. It should be at a discounted rate, because you already have it in place, but a new policy is required any time a new mortgage is obtained.

Where the benefit comes in is you might get a way with a slightly lower sales price with a seller who would prefer cash and a quick closing than a buyer with 5% down needing financing and taking longer to close.
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Old 06-12-2018, 05:47 PM
 
Location: Cary, NC
31,373 posts, read 54,935,154 times
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It may be worthwhile to pay cash if it means getting to the head of the line ahead of people who are financing.

Yeah, cash out financing will be a bit pricier, but you won't pay interest at all if you don't get the house.

Here's an old thread on the topic:

Does submitting a true 'cash' offer give a big advantage to potential buyer?
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Old 06-12-2018, 06:11 PM
 
Location: Blue Ridge Mntns., NC
10,128 posts, read 13,945,126 times
Reputation: 8624
Quote:
Originally Posted by emm74 View Post
A re-finance of an existing loan isn't the same thing as taking a brand new cash out re-fi loan and you are mistaken that you are going to get away without paying for a re-fi under these circumstances.




An equity loan is a trap. Interest rate will be higher than if you had taken out a regular first mortgage. With an equity loan you pay the interest plus your monthly pmt. Simple example to borrow $25K: -


e.g. Loan payment on $25,000 itself @ 7.50% (which is not a fixed rate) will be about 180.00 /mo. and will rise as interest rates increase.

Then you make a payment on the principal: you can pay what you want to reduce the principal.

So you could end up paying the $180 + let's say $300/mo. For $480/mo. if you choose that steady payment.


It's a no win situ. Take a 1st mortgage only, not an equity loan.


Or be even smarter if you don't need the cash: Just put $500. away every month in the bank. and have NO mtg.
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Old 06-12-2018, 08:29 PM
 
Location: MID ATLANTIC
7,564 posts, read 17,485,811 times
Reputation: 8026
Quote:
Originally Posted by wheelsup View Post
Hello

I'm wondering if it's possible to buy a home in full with a check and then once moved in do a "refi" of sorts and take out a loan. Would be at least 80% probably more like 50% or so.

What are the rates like on this arrangement? Fees? I know when first buying a home the fees are outrageous, when we refi'd they were super low and the process was very simple. Hoping it's more the latter than the former.

I'd like to avoid all the BS and fees plus delay associated with getting a mortgage but would like to take the cash back out to put back into investments once settled.

HELOC is not what I'm looking for as they have high rates. Looking for a standard 10 or 15 year.

Thanks
We refer to this as a technical refi. It's priced as a purchase, must be done within 6 months of purchase, you must document the funds used were seasoned (in your possession for at least 60 days). The value will be the lesser of the original purchase price or appraised value.
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